Tag: Financial

  • Strong budgeting, revenue flexibility key to weathering K-12 financial storm, says Moody’s

    Strong budgeting, revenue flexibility key to weathering K-12 financial storm, says Moody’s

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    Dive Brief:

    • School districts with strong budget management and the ability to raise revenue, in addition to state funding access, will be able to better weather the financial storm exacerbated by recent federal changes in education policy, according to a Moody’s Ratings’ report released last week. 

    • A significant increase in state aid could stave off effects from shrinking federal support under the Trump administration. However, any states’ plans to bolster school funding may be scrapped to adapt to other federal policy changes such as reduced Medicaid or disaster recovery funding. 

    • School districts in most states have an average ability to increase revenue. Districts in Arizona, Kansas, Michigan, New Mexico, Nevada and Oklahoma have more limited revenue-raising flexibility than other states, the report said.

    Dive Insight:

    Districts have faced financial turmoil in the past few months, as the Trump administration continues to change course on federal funding that was expected to be available for districts.

    The administration withheld pandemic aid reimbursements, for example — a decision it then walked back. It also recently delayed $6.2 billion in federal K-12 grants, only part of which the administration has said it would release so far. 

    States with a greater dependence on federal funding “will translate into additional credit pressure if federal funding is reduced,” the report said. Arizona and Oklahoma, for example, rely on federal funding for more than 20% of their K-12 budgets.

    Overall, the federal government provides 13.6% of total K-12 funding, according to the Education Data Initiative.

     Additional changes on the federal level will impact school district budgets such as an expansion in school choice — with the nation’s first federal school voucher program available nationwide established through the “One Big, Beautiful Bill.” The major tax and spending package was narrowly passed by Congress and signed by President Donald Trump earlier this month. 

    “This shift could result in enrollment being redirected to alternatives outside traditional K-12 districts,” the Moody’s report says. 

    In another Moody’s report released in April, the financial outlook and research organization showed that states are unlikely to fill gaps left by the federal government changes, leaving districts with a “limited menu of options.”

    “While many states have indeed increased their K-12 education funding, whether these efforts will fully offset the impact of reduced federal support remains uncertain,” said Gregory Sobel, senior analyst and vice president at Moody’s Ratings, in an email to K-12 Dive. Sobel said that “while state support is growing, it may not be sufficient to fully counterbalance the combined effects of reduced federal aid and heightened competition.”

    Districts are already feeling the blowback from federal-level changes. 

    About 85% of superintendents said they have existing contracts previously paid with federal funds that are currently being withheld, forcing them to backfill with local dollars, according to a survey released Tuesday of nearly 630 district leaders across 43 states. 

    As a result of these spending changes, nearly three quarters of surveyed districts will have to scrap academic services for students, such as tutoring and before or after-school programming, according to the poll conducted by AASA, the School Superintendents Association. Half of superintendents said they will have to make labor cuts, including in special education.

    “This isn’t a future problem; it’s happening now,” one superintendent said in the survey. “Our budget was set with these funds in mind. Their sudden withholding has thrown us into chaos, forcing drastic measures that will negatively impact every student, classroom, and school in our district.”

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  • Minnesota Alters Financial Aid Program Formula

    Minnesota Alters Financial Aid Program Formula

    Minnesota lawmakers managed last month not only to close a $239 million deficit in the state’s largest financial aid grant program, but also to increase its funding by $44.5 million over the next two years. But they did so by changing the funding formula, meaning some students may still find themselves with less aid for college, The Minnesota Star Tribune reported Tuesday.

    The Minnesota State Grant program helps middle- and low-income students enrolled at in-state technical schools, colleges or universities pay for educational expenses, such as housing and tuition. While not every student’s financial aid award will decrease this year, many are still waiting to find out how the changes to the formula will change their award.

    The amount each student receives is tied to their family size and income, and during the 2025–26 academic year grant values are expected to range from $100 to $17,717. Last year, average grants awards were cut by anywhere from $175 to $730 to offset the program’s then-$40 million deficit.

    According to The Star Tribune, changes to the formula include:

    • Students can receive the grant for four years of full-time attendance, down from the previous six-year cap.
    • Students who are dependents are responsible for paying an increased total cost of college.
    • There is an earlier application deadline.
    • Students will receive less money for living and miscellaneous expenses, such as room, board and transportation.
    • There is a reduced maximum amount awarded for tuition and fees to match the University of Minnesota’s Twin Cities’s rates, plus a 2 percent reduction for each of the next two years, regardless of how much tuition increases there. If a student attends a school that costs less, they are awarded the average cost of tuition and fees at that institution.

    Republican state senator Zach Duckworth said some of the changes are temporary. “I don’t think anybody was entirely happy with the end results, but the fact that we were able to increase some funding [to the State Grant overall] for students and families was a good thing,” he told The Star Tribune.

    The changes come as Congress is also weighing President Donald Trump’s proposal to cut TRIO, federal work-study and other federal programs that support college students.

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  • Higher Education Inquirer : College Financial Aid: How It Really Works

    Higher Education Inquirer : College Financial Aid: How It Really Works

    Crucial Insights: Understanding College Financial Aid Dynamics

    (00:02:56) Variety of College Financial Assistance Options
    (    00:05:18) Scholarships: Balancing Merit and Financial Need
    (    00:10:00) Student Selection Strategies in College Admissions
    (    00:21:40) Financial Aid Strategy at Competitive vs. Smaller Schools
    (    00:26:29) Major-based Financial Aid Allocation in Colleges

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  • Financial Pressures Could Have Cascading Effects (opinion)

    Financial Pressures Could Have Cascading Effects (opinion)

    In April, Harvard University, despite its $53.2 billion endowment, announced plans for a $750 million bond issuance to bolster liquidity amid uncertainties over federal funding. Similarly, Brown University concluded its decade-long BrownTogether fundraising campaign, raising more than $4.4 billion, yet soon after secured a $300 million loan in the face of a structural budget deficit and the cancellation of federal grants. And in May, Columbia University announced layoffs of approximately 180 staff members after the federal government revoked $400 million in federal grants and contracts, citing the university’s handling of antisemitic harassment on campus.

    Together, these actions underscore that even the nation’s most selective and well-resourced universities are vulnerable to financial strain and are recalibrating rapidly in response to shifting economic and political forces. By contrast, less well-resourced, tuition-dependent institutions often confront the same headwinds, or their downstream effects, with fewer financial options and diminished capacity to respond.

    Liquidity and the Endowment Misconception

    A common misconception is that universities can freely tap into their endowments to address financial shortfalls. In reality, a significant portion of endowment assets are legally restricted by external donor agreements, regulatory frameworks and board policies. According to the NACUBO-Commonfund Study of Endowments, an average 71.1 percent of endowment funds are restricted by donor agreements alone. These funds are typically earmarked for specific purposes such as scholarships, endowed faculty positions or capital projects.

    Endowments are vital to institutional operations but are not unbounded. In fiscal year 2024, colleges and universities withdrew a total of $30 billion from their endowments, representing a 6.4 percent increase over the prior year, with nearly half of that spending (48.1 percent) dedicated to student financial aid. On average, endowments funded 15.3 percent of institutional operating budgets, underscoring their importance in day-to-day fiscal planning.

    At the same time, most institutions cap annual withdrawals at approximately 4.5 to 5 percent of a rolling three-year average to preserve long-term value. Exceeding these thresholds can jeopardize an endowment’s sustainability and may violate both donor restrictions and regulatory requirements. Consequently, when immediate cash needs surpass allowable draws, universities often turn to bond markets or bank loans, trading short-term liquidity for future debt obligations. According to a Forbes report, U.S. universities issued a record $11.6 billion in municipal bond debt in the first quarter of 2025 to safeguard operations amid federal funding cuts.

    Fiscal and Legal Acumen: A New Leadership Imperative

    In the current climate, effective university leadership requires not only academic vision but also robust financial and legal expertise. Leaders must navigate complex debt covenants, bond rating pressures and donor restrictions while transparently communicating difficult decisions to trustees, faculty, students and the public. These challenges, at least financially, arguably surpass those faced during the COVID-19 pandemic, when federal relief funds temporarily masked underlying vulnerabilities.

    Rising Insolvency Risk Beyond Public Campuses

    Recent announcements by private Research-1 universities suggest several well-known institutions—among them Duke and Northwestern Universities—could encounter significant fiscal strain if current federal research funding trends persist. While nonselective public research universities are often viewed as the most vulnerable to federal funding cuts, some prominent private institutions also face rising risk. High fixed costs, tuition and/or research dependency, and limited unrestricted endowment income create financial fragility as grants plateau.

    Enrollment Shocks: A Cascade in Waiting

    An often-overlooked but potentially destabilizing factor is the cascading effect on enrollment should elite institutions expand freshman classes and nonresearch focused graduate programs by aggressively tapping wait lists to compensate for financial shortfalls. While larger cohorts can spread overhead costs and generate additional tuition revenue, rapid expansion without strategic planning can strain housing, advising and support services, potentially degrading the student experience and affecting retention.

    For example, if the top 50 universities each increase enrollment by even 5 percent, thousands of well-qualified students may shift upward, siphoning tuition dollars from regional publics, tuition-dependent privates and community colleges. For institutions already operating on thin margins, this loss of yield could prove existential.

    This scenario recalls the 2008 financial crisis: a shock at the top reverberated across sectors. Here, if highly selective colleges “catch a cold,” more vulnerable campuses may suffer a deeper freeze.

    Equity and Access Under Pressure

    The most severe consequences are likely to impact lower-income students. Potential elimination of federal support programs like federal TRIO programs and Gaining Early Awareness and Readiness for Undergraduate Programs, coupled with the potential cascading effects outlined above, risk widening the affordability gap. To shore up budgets, financially stressed institutions may tighten aid packages and prioritize full-pay applicants. Simultaneously, regional institutions that disproportionately serve these populations face their own budget constraints, compounding threats to access and social mobility. Conversely, other financially stressed colleges may opt to elevate unfunded tuition discount rates to unsustainable levels in order to meet enrollment targets, an action we have witnessed during less stressful periods.

    Summer Melt: An Immediate Barometer

    The impending summer melt period—when students who have submitted deposits ultimately decide not to enroll—may serve as a real-time stress indicator. Historically, national melt rates hover around 10 to 20 percent, but even a two- to three-percentage-point uptick for small, tuition-driven colleges can force emergency cuts. If selective universities reach deeper into their wait lists this summer, downstream institutions could experience sudden enrollment gaps as fall semesters are about to begin.

    Toward Long-Term Resilience: Strategic Levers

    As the financial headwinds intensify, universities must couple urgency with discipline. Ensuring alignment among institutional leaders, preserving trust and activating institutional flexibility will be key. The following strategic levers offer a practical framework for leaders aiming to build resilience without losing sight of mission.

    1. Ensure board and leadership alignment: Any misalignment between governing boards and executive teams can slow decision-making and erode credibility. Clear alignment around scenario planning, liquidity thresholds and contingency triggers is paramount.
    2. Embrace shared governance: Genuine engagement with faculty, staff and students in fiscal deliberations can enhance adaptability and morale. Institutions that bypass shared governance risk midcareer talent attrition, as well as diminishing instructional quality and grant productivity.
    3. Rethink spending policies: Regular reassessment of endowment draw methodologies, debt covenants and liquidity lines is essential. Short-term borrowing can bridge operational gaps but should be paired with disciplined multiyear plans that include potential program realignment and other austerity measures.
    4. Diversify revenue streams: Institutions must increase nontraditional tuition income, such as from online certificates, executive education and micro-credentials. Commercializing research can generate revenue, however, safeguards are necessary to prevent a slide into “University Inc.” cynicism—the sense that institutions are prioritizing profit over scholarship.
    5. Strengthen financial transparency: Open dashboards tracking liquidity ratios, debt service coverage ratios and aid spending cultivate trust and temper rumor-driven resistance. Responsible transparency should extend to explaining why certain programs may face review in the name of institutional sustainability.

    The Faculty and Staff Dimension

    Financial pressures inevitably affect human capital. Institutions that announce austerity plans without clear road maps invite uncertainty and, ultimately, attrition among faculty and staff. Retention of human capital is crucial not only for educational quality but also for grant productivity and student success. Engaging employees in strategic trade-offs—such as phased retirement options, the cross-training of staff to handle multiple roles as part of new revenue initiatives or shared services efficiencies—can transform potential resistance into collaborative resilience. But these strategic trade-offs also impact human capital.

    What About Academic Mission?

    Some argue that larger entering classes could enhance diversity or increase institutional reach. Others worry that an aggressive growth mindset dilutes faculty engagement and student mentorship. Both perspectives merit consideration. Growth for growth’s sake, particularly when propelled by crisis rather than strategy, risks eroding the very qualities that make a campus distinctive.

    A Crucible Moment

    Higher education has weathered wars, recessions and a global pandemic, but today’s convergence of shrinking research support, demographic shifts and rising debt costs presents a challenge not witnessed in recent history. Liquidity stress is reaching even elite campuses.

    The lessons from recent bond issuances, emergency loans and layoffs are clear: Action must come before distress spreads further. Institutions that act now by aligning leadership, engaging stakeholders, adjusting spending, diversifying revenue and communicating clearly will emerge stronger and more mission‑focused.

    Those that delay risk letting early warning signs become full‑blown alarms.

    As summer melt data arrives and fiscal year budgets close, we will soon learn whether these echoes from the Ivies were just noise—or the first tremors of something more.

    Joseph E. Nyre served as president of Seton Hall University from 2019 to 2023 and of Iona University from 2011 to 2019. He is the founder and managing director of Veritas Solutions Advisors, a higher education and nonprofit consulting company.

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  • Increased ID Verification for Financial Aid Raises Questions

    Increased ID Verification for Financial Aid Raises Questions

    Students will soon have to show a government-approved ID either in person or online in order to receive federal aid.

    Photo illustration by Justin Morrison/Inside Higher Ed | michaeljung and robas/iStock/Getty Images

    College financial aid offices and students’ advocates say that a Trump administration plan to crack down on fraud in the federal aid system could burden university staff and hinder access to college programs.

    Although they support fighting fraud as a concept, they particularly worry that real, eligible Pell Grant recipients will get caught up in the detection system and won’t be able to jump through the extra hoops to verify their identity.

    “In general, verification is a little bit of threading the needle between making sure that the right dollars are going to the right students, but also not putting up an inordinate number of barriers, particularly to low-income students, that are insurmountable,” said Karen McCarthy, vice president of public policy and federal relations at the National Association of Student Financial Aid Administrators. “You have to walk a fine line between those two things.”

    Department of Education officials, however, say their plan, announced June 9, is necessary to protect American taxpayers from theft and won’t become a burden for colleges. They aren’t worried about students losing access, either.

    Ultimately, the Trump administration plans to verify the identity of each financial aid applicant with the help of a new system that should be up and running “this fall,” according to the department’s announcement. Before then, the department is planning to screen more first-time applicants for verification—a process that could affect 125,000 students this summer and will be handled by financial aid offices. (About 40,000 students were checked last year, according to a department spokesperson.)

    McCarthy, however, is concerned that if the new system isn’t ready by the fall, “institutions will be assuming this larger burden for a longer, indeterminate amount of time.” The department’s botched launch of the 2024–25 Free Application for Federal Student Aid showed the challenges of standing up new systems quickly, she noted.

    A senior official at the Department of Education told Inside Higher Ed that the Office of Federal Student Aid and the department procurement team are in the process of purchasing an identity-validation product similar to the ones used by financial services companies like banks. The product would be incorporated into the online FAFSA portal.

    If an individual is flagged for potential fraud at any point while filling out the form, a pop-up box would appear with a live staff member on the other side, the official explained. The applicant would then be asked to display a government-issued ID. If that ID is deemed valid, the person could then continue.

    “Once that’s done, the process is over,” the official said. “That’s really as simple as that effort is. I believe rental car companies are using it, too.”

    The official was optimistic that the department could have the system up and running by early September, though that won’t be soon enough to get aid disbursed in time for the fall semester. The official also acknowledged that the timeline means that colleges may have to do some verification in person even in the fall, but that process should not be too much of a burden for the college or the student. Similar to the online process, a student would just need to show a valid ID to a college financial aid administrator, either in person or over a video call. Previously, when identity verifications were conducted, students had to present a Statement of Educational Purpose and submit a notarized copy of their identification document.

    But advocacy groups that work with low-income students worry that even requiring a government-issued ID could give some students a leg up over others when it comes to accessing financial aid and affording to enroll in college.

    “We want to see fraud eliminated as much as anyone else … We just need to make sure that gets balanced with a reasonable process for students,” said MorraLee Keller, a senior consultant for the National College Attainment Network. “A lot of low-economic kids may not have secured, for example, a driver’s license. If they don’t drive, they may not have a driver’s license, and that is probably the primary form of a government-issued valid ID that most people would be able to present.”

    Keller noted that some states may have alternate IDs available for those who do not drive, but even that may take time to obtain if a student doesn’t already possess it.

    “We want to make sure that timing doesn’t interrupt the aid getting credited to their account to pay their bills on time so that they could start classes, get refunds to go get their books and all those kinds of things,” she said. “So one of the questions that we still need answered is, what else would be considered a valid ID?”

    The California Community College system, which has grappled with increasing financial aid fraud, recently considered an application fee to help screen legitimate students from fraudsters. A spokesperson for the system said they are waiting on additional guidance from the department before they can know how big a deal this shift will be.

    “We wouldn’t be able to speculate on the level of concern among students and institutions until the federal guidance is known,” she wrote. But “financial aid fraud is a nationwide trend and additional identification verification processes will help in the fight against it.”

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  • Colleges Support Student Financial Literacy Education

    Colleges Support Student Financial Literacy Education

    Students often consider the return on investment of their degree when deciding whether and where to enroll in college, but not every student receives financial education from their institution on how to turn a college education into a life-sustaining career. A 2022 survey by Inside Higher Ed found that 67 percent of students are not sure if their college or university offers personal financial education; an additional 9 percent said no programs or classes are offered regarding financial literacy.

    To rectify that, colleges and universities are implementing programs that promote students’ money management skills, increase their awareness of financial planning and help them understand the debts they may acquire while in school.

    What’s the need: Student debt has skyrocketed over the past 20 years, with 42.7 million student borrowers holding nearly $1.7 trillion in federal loans. The average student who takes out loans to attend a public university borrows $31,960 to attain a bachelor’s degree, and over half of graduates use federal loans at some point. Loan debt can limit students’ earnings after college and hinder their socioeconomic advancement.

    Even while students are in college, financial challenges can impact their persistence and outcomes. A 2024 survey by Trellis Research found that 71 percent of students experienced financial trouble while enrolled, and nearly half said their current financial situation made it difficult to concentrate on schoolwork.

    A lack of financial education can also exacerbate equity concerns. An April 2025 report from Education Northwest found that only 25 percent of students were able to answer three financial questions correctly, with students from low-income families and those younger than 21 even less likely to answer correctly. Similarly, Black, American Indian or Alaska Native, Hispanic or Latino, and Native Hawaiian or Pacific Islander students were less likely to answer financial literacy questions correctly.

    Inside Higher Ed highlights six institutions that have introduced innovative programs to combat financial illiteracy.

    1. Florida State University: Unconquered by Debt

    Housed within the university’s Gus. A Stavros Center for Advancement of Free Enterprise and Economic Education, FSU’s Unconquered by Debt program enhances student financial literacy to ensure graduates leave with the ability to advance their socioeconomic standing.

    The program walks students through crucial areas of financial planning including selecting a career, establishing healthy spending habits, investing, managing credit, ensuring assets and planning for retirement.

    Students can attend workshops on campus and enjoy free food and drinks while they learn more about money management and how to plan for their futures beyond college.

    The center recently hired an assistant director as part of a program expansion funded by the Office of the Provost.

    1. University of Miami: Money Management

    In 2019, the University of Miami created the Money Management Program to help build students’ short- and long-term financial well-being. The program has proven so successful in increasing student persistence that it has also received external grant funding, a university spokesperson said.

    Through workshops called Money Talks, the program addresses budgeting, credit and credit cards, loans, and debt repayment, as well as saving and investing. Students can also participate in half-day personal finance workshops on Saturdays throughout the academic year. The university hires peer coaches to provide confidential one-on-one coaching, to help prepare students for future careers in the finance world as well as bridge knowledge gaps for those who may need support.

    During the 2022–23 academic year, the university hosted over 240 Money Management events for more than 2,500 attendees, according to the spokesperson.

    1. East Carolina University: Financial Wellness Hub

    The Financial Wellness Hub at East Carolina University offers regular workshops on how to mitigate financial challenges while enrolled and helps students understand credit reports, debt management and student loan repayment strategies. The Hub caters services to various seasonal holidays, hosting a “Falling in Love With Credit” workshop for Valentine’s Day and “Spooky Credit Scores” for Halloween, as well as a budgeting workshop for gift giving during the winter holiday season.

    The Hub relies on relationship building and partnerships across the university to generate an audience for programs, director Kevin Sutton told Inside Higher Ed. Services are also available to alumni and staff, who in turn can better advise students or elect to contribute financially to the program’s budget.

    1. Penn State: Sokolov-Miller Family Financial and Life Skills Center

    Penn State established a center dedicated to managing financial wellness in college and beyond, which offers one-on-one coaching and workshops. In addition, the center provides students with access to a course on Canvas called MoneyCounts, which gives them a self-paced opportunity to engage in 28 modules on financial wellness.

    Other resources include live webinars, offered on the first and third Tuesday of each month at noon, which are recorded for those who can’t make it synchronously, and a free bookshelf stocked with financial wellness books— topics range from simple money skills to insurance—that is supported by Barnes & Noble.

    1. Babson College: The Babson Financial Literacy Project

    In addition to supporting current students, the BFLP is a nonprofit organization the ensures all community members can receive quality financial education. The program was developed by faculty at Babson and coaches lead online and in-person workshops, as well as train staff to deliver content on their own.

    Between its launch in fall 2018 and March of this year, the program has supported 418 workshops with 17,189 participants, according to the program webpage.

    In addition, participants can engage with various student organizations on campus to learn more about the world of finance, including the Babson Finance Association, Babson Scholars of Finance and Women in Finance.

    1. Western Washington University: Financial Wellness Badges

    At WWU, students can engage with the Merriman Financial Literacy program through workshops, online courses delivered via iGrad, peer mentorship and digital badging.

    Students can earn badges in such areas as financial mindfulness, investment, savings and credit, as well as budgeting and spending.

    To earn the financial mindfulness starter badge, for example, students must complete a financial wellness checkup and a money meditation on iGrad, then write a financial wellness journal entry. Each badge has three levels, from foundations to expert, building on students’ knowledge and signaling deep understanding of the topic.

    If your student success program has a unique feature or twist, we’d like to know about it. Click here to submit.

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  • Victorian universities table 2024 financial results – Campus Review

    Victorian universities table 2024 financial results – Campus Review

    A majority of Victorian universities posted operating losses in 2024 but continued to boost the salaries of their vice-chancellors, annual reports reveal.

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  • Graduation Season: Financial Advice Every Parent Should Pass Down

    Graduation Season: Financial Advice Every Parent Should Pass Down

    As May ushers in graduation ceremonies across the country, proud families gather to celebrate a new chapter for their children. Whether it’s high school or college, graduation marks a pivotal life transition—one filled with promise, independence, and financial responsibility.

    At Peachtree Financial, I often speak with parents who wonder how to best support their children as they begin this next phase. They want to offer guidance—not just about careers and character, but also about money. The challenge is doing so in a way that empowers their children rather than enabling them.

    This article is for parents and grandparents who are ready to pass down not just wealth—but wisdom.

    1. Teach the Value of Money Early and Often

    One of the most powerful lessons a parent can instill is the relationship between work, earnings, and spending. While many young adults understand how to swipe a card or use an app, far fewer grasp how money flows, how it grows, or how quickly it can disappear without a plan.

    Consider sitting down with your graduate to review:

    • How to build and stick to a monthly budget
    • How compound interest works (both in savings and in debt)
    • The importance of living below their means early on

    Don’t be afraid to be transparent about your own experiences—sharing both successes and mistakes. Personal stories are often more impactful than abstract advice.

    2. Encourage the “Pay Yourself First” Mentality

    A foundational concept in long-term financial planning is saving before spending. Too many young professionals fall into the trap of lifestyle inflation—where expenses rise with income, leaving little room for building wealth.

    Whether your child is earning an entry-level salary or launching a business, help them understand the value of:

    • Saving a consistent percentage of each paycheck
    • Automating contributions to a Roth IRA or employer-sponsored retirement plan
    • Maintaining an emergency fund with 3–6 months of living expenses

    Consistently saving and investing early—even modest amounts—can potentially accumulate significant value over time, depending on market conditions and investment choices.

    3. Credit is a Tool, Not a Trap

    Graduates will soon be offered credit cards, student loan consolidations, and other financial products. Without guidance, they may quickly find themselves in debt or struggling with poor credit.

    Sit down with them to cover:

    • How credit scores are calculated
    • The importance of paying off balances in full and on time
    • The long-term consequences of carrying high-interest debt

    You may also consider co-signing a credit card with a low limit to help them begin building credit responsibly.

    4. Make Giving and Gratitude Part of the Financial Equation

    True financial wellness isn’t just about accumulating wealth—it’s about using it meaningfully. Encourage your graduate to build charitable giving or community involvement into their financial life, even if modest at first.

    This could include:

    • Donating a small percentage of earnings to causes they care about
    • Volunteering time or skills
    • Supporting friends or family with intention and boundaries

    This cultivates a mindset of generosity and financial purpose.

    5. Start the Wealth Transfer Conversation Early

    Many families avoid discussing inheritance or legacy planning until it’s too late. But open communication is key—especially if you anticipate transferring wealth to your children in the future.

    Now is a good time to:

    • Share your financial values and goals
    • Explain any plans for trusts, real estate, or family business succession
    • Frame wealth as a responsibility as well as a resource

    If you’re unsure how to begin, a trusted advisor can help guide these conversations.

    6. Encourage a Long-Term Relationship with a Financial Advisor

    Graduation is a perfect opportunity to introduce the value of professional financial guidance. Partnering with an advisor early can help your child:

    • Set short- and long-term financial goals
    • Understand investment fundamentals
    • Build accountability outside of parental oversight

    At Peachtree Financial, we often work with multi-generational families to help ensure that financial literacy and legacy planning are passed down with clarity and care.

    As a father and advisor, I know that helping our children thrive financially is one of the most meaningful investments we can make. Graduation is more than a celebration—it’s an open door to independence and responsibility.

    This season, take a moment to share the gift of financial wisdom. It’s one that can last far longer than any diploma.

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  • OfS continues to sound the alarm on the financial sustainability of English higher education

    OfS continues to sound the alarm on the financial sustainability of English higher education

    For the third year in a row, the English higher education sector’s collective financial performance is in decline.

    That is the conclusion of the latest annual assessment of the sector’s financial sustainability from the Office for Students (OfS), based on finance returns for 2023-24.

    Overall, after stiff warnings this time last year about the risks of system-wide provider deficits if projected student number growth failed to materialise, OfS says that many providers are taking steps to manage their finances, by reducing costs and downgrading recruitment growth projections. It remains unlikely, says OfS, that a large provider will become insolvent in the coming financial year.

    But 43 per cent of providers are forecasting a deficit for the current financial year 2024–25, and there is an overall decline in overall surplus and liquidity – albeit with the expectation of growth in the years ahead. While larger teaching-intensive and medium sized providers were more likely to report a deficit, there is also quite a lot of variation between providers in different groups – meaning that institution type is not a reliable guide to financial circumstances.

    Recruitment woes

    Student recruitment is the most material driver of financial pressure, specifically, a home and international student market that appears insufficient to fill the number of places institutions aspire to offer. The broad trend of institutions forecasting student number growth in hopes of offsetting rising costs – including national insurance and pension contributions – makes it unlikely that all will achieve their ambitions. There’s evidence that the sector has scaled back its expectations, with aggregate forecast growth until 2027–28 lower than previous forecasts. But OfS warns that the aggregate estimate of an increase of 26 per cent in UK entrants and 19.5 per cent in non-UK entrants between 2023–24 and 2027–28 remains too optimistic.

    Questioned further on this phenomenon, OfS Director of Regulation Philippa Pickford noted that there is significant variation in forecasts between different providers, and that given the wider volatility in student recruitment it can be really quite difficult to project future numbers. The important thing, she stressed, is that providers plan for a range of possible scenarios, and have a mitigation plan in place if projections are not achieved. She added that OfS is considering whether it might give more information to providers upfront about the range of scenarios it expects to see evidence of having been considered.

    Storing up trouble

    While the focus of the financial sustainability is always going to be on the institutional failure scenario, arguably an equally significant concern is the accumulation of underlying structural weaknesses caused by year-on-year financial pressures. OfS identifies risks around deferral of estates maintenance, suspension of planned physical or digital infrastructure investments, and a significant increase in subcontractual (franchising) arrangements that require robust governance.

    All this is manifesting in some low-key emergency finance measures such as relying on lending to support operating cashflow where there is low liquidity at points in the year, selling assets, renegotiation of terms of covenants with lenders, or seeking injections of cash from donors, benefactors or principal shareholders. Generally, and understandably, the finance lending terms available to the sector are much more limited than they have been in the past and the cost of borrowing has risen. The general increases in uncertainty are manifest in the increased work auditors are doing to be able to confirm that institutions remain a “going concern.” Such measures can address short-term financial challenges but in most cases they are not a viable long term strategy for sustainability.

    OfS reiterates the message that providers are obligated to be financially sustainable while delivering a high quality student learning experience and following through on all commitments made to students – but it’s clear that frontline services are in the frame for cuts and/or that there is a limit to the ability to reduce day-to-day spending or close courses even when they are loss-making if there is likely to be an impact on institutional mission and reputation. Discussions between OfS and directors of finance point to a range of wider challenges around increased need for student support, the difficulty of recruiting and retaining staff, the increasing costs of conducting research, and shifts in the student accommodation rental market. Some even pointed to the cost of investment in AI-detection software.

    The future is murky

    The bigger picture points to long term (albeit unpredictable) shifts in the underlying financial model for HE. Philippa Pickford’s view is that institutions may need to shift from taking a short-term view of financial risks to a longer-term horizon, and will need to grapple with what a sustainable long term future for the institution looks like if the market looks different from what they have been used to. Deferral of capital investment, for example, may keep things going for a year or two but it can’t be put off indefinitely. There’s a hint in the report that some institutions may need to invest in greater skills, expertise and capacity to understand and navigate this complicated financial territory – and OfS is taking an increased interest in multi-year trends in financial performance, estates data and capital investment horizons in its discussions with providers.

    The situation remains, however, that OfS is primarily empowered to monitor, discuss, convene and, if necessary, issue directives relating to student protection. Activity of this nature has ramped up considerably in the past year, but financial sustainability remains, at base, individual providers’ responsibility – and system-level intervention on things like changing patterns of provision, or management of the wider impact of institutional insolvency, nobody in particular’s. Government is, of course, aware of the problem but has not yet given a steer on whether its upcoming HE reform measures, expected to be published in the summer after the spending review, will grasp the nettle in delivering the support for transformation the sector hopes to see.

    OfS has now said that it is talking to government to put forward the view that there should be a special administration regime for higher education. This signals that while the immediate risks of institutional closure or “disorderly market exit” are low, the pressures on a small number of institutions remain considerable. On the assumption of little or very modest changes in the funding model in the upcoming spending review, and ongoing competitive pressures, there will almost inevitably be losers.

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  • Columbia Lays Off 180 Amid “Intense” Financial Strain

    Columbia Lays Off 180 Amid “Intense” Financial Strain

    Columbia University is laying off 180 researchers after the Trump administration cut the university’s research funding by more than $650 million.

    “Columbia’s leadership continues discussions with the federal government in support of resuming activity on these research awards and additional other awards that have remained active, but unpaid,” university leadership wrote in a memo Tuesday morning. “We are working on and planning for every eventuality, but the strain in the meantime, financially and on our research mission, is intense.”

    While federal agencies such as the National Institutes of Health, the National Science Foundation and the Department of Energy have cut research funding at universities across the country, the Trump administration has specifically targeted a handful of high-profile universities, including Columbia, for allegedly failing to curb antisemitism on campus. 

    Columbia is taking a two-pronged approach to navigating the sudden deep cuts to federal research funding. The first focuses on “continued efforts to restore our partnerships with government agencies that support critical research,” and the university said the second prong is about taking “action to adjust—and in some cases reduce—expenditures based on current financial realities.”

    Despite Columbia’s previous president acquiescing to Trump’s demands to enact numerous policy changes to address alleged unchecked antisemitism if it wanted its funding back, the university is still negotiating to recover it. In the meantime, the layoffs announced Tuesday represent about 20 percent of researchers who are funded “in some manner by the terminated grants,” according the statement signed by Claire Shipman, Columbia’s acting president; Angela V. Olinto, provost; Anne Sullivan, executive vice president for finance; and Jeannette Wing, executive vice president for research. 

    And the layoffs this week likely aren’t the end of the financial repercussions of the cuts to Columbia’s federal research funding. 

    “In the coming weeks and months, we will need to continue to take actions that preserve our financial flexibility and allow us to invest in areas that drive us forward,” the statement said. “This is a deeply challenging time across all higher education, and we are attempting to navigate through tremendous ambiguity with precision, which will be imperfect at times.”

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